Circana’s 2026 Food & Beverage Outlook Reveals Growth Driven by Price and Product Mix as Consumers Optimize Spending

Decoding 2026: How Price and Product Mix Will Drive Food & Beverage Growth Amid Consumer Optimization

As we look ahead to 2026, the U.S. food and beverage (F&B) retail sector is poised for a fascinating period of nuanced growth. Circana, a leading authority in consumer insights, recently unveiled its revised outlook, painting a picture of continued volume challenges but dollar sales growth primarily driven by price and product mix.

Navigating the U.S. Food & Beverage Landscape in 2026

Circana’s forecast for 2026 anticipates total retail F&B dollar sales growth to land between 2% and 4%. Interestingly, this growth isn’t expected to come from booming volumes, which are projected to be flat or even slightly negative. Instead, the momentum will be fueled by price/mix growth, also ranging from 2% to 4%.

Several factors are shaping this unique environment:

  • Persistent Supply Costs: Despite some tariff relief, packaged goods continue to face rising supply costs.
  • Intense Competition & AI: The retail landscape is fiercely competitive, and the increasing adoption of AI-supported technology is playing a crucial role in keeping price growth in check, even as underlying costs remain high.
  • Cautious Consumers: With consumer confidence remaining weak, shoppers – particularly in lower and middle-income brackets – are pulling back on non-essential spending. Their focus? Maximize price-value for every dollar spent. This means we’re likely to see a slowdown in premiumization and an intensification of value-seeking behaviors.
  • The Rise of Fresh: Healthy living trends, a heightened awareness of product ingredients, and the growing influence of weight-loss drugs are all contributing to an expected surge in demand for fresh categories.

“Our revised 2026 outlook reflects a market that is tightening and more challenging, but not without growth vectors,” shares Sally Lyons Wyatt, global executive vice president and chief advisor at Circana. “While pricing pressures and cautious consumer sentiment are shaping a more measured growth trajectory, the food and beverage sector continues to demonstrate resilience and adaptability. Brands and retailers that prioritize affordability, channel flexibility, and personalized experiences will be best positioned to succeed in 2026’s competitive landscape.”

A Global Perspective: F&B Trends Beyond the U.S.

Europe’s Steady Ascent

Across Europe, F&B value sales are expected to maintain a steady growth of around 4% in 2026, mirroring 2025 trends. This growth will largely be spurred by deeper promotional efforts designed to boost sales velocity and the continued expansion of private labels, which now command an impressive 44% of F&B value – a significant jump from 41% just three years ago.

ANZ Region’s Accelerated Units

In the Australia and New Zealand (ANZ) region, Circana projects unit sales to accelerate by 2.5% in 2026. An improving consumer and economic environment will support increased spending. Coupled with spikes in price/mix, this will push value growth upwards of 6%, effectively offsetting slower population growth. Both Australia and New Zealand anticipate F&B to drive growth, though the gap with non-food categories is expected to narrow.

Strategies for Success in a Dynamic Market

The F&B market remains resilient, but growth in 2026 will be more nuanced. Brands that can master the balance of pricing, innovation, and consumer empathy are set to thrive. Circana offers key advice for brands and retailers:

  • Address Value Needs: Offer accessible opening price points for lower-income shoppers, while fine-tuning the price-value equation for higher-income groups.
  • Channel Optimization: Strategically align channel coverage and promotional investments with consumers’ evolving shopping patterns.
  • Personalization and Innovation: Leverage AI, especially in e-commerce, to differentiate assortments and messaging. Focus on meeting ever-changing consumer expectations around wellness, convenience, and taste.

As the F&B landscape continues to evolve, understanding these shifts and adapting strategies will be paramount. 2026 promises to be a year where smart, empathetic, and data-driven approaches win the day.

Source: Original Article